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Cost Performance Index (CPI) as 1 indicates ?

Submitted by harishgulati on Sun, 09/25/2011 - 00:39

What does a Cost Performance Index (CPI) of more than 1.0 indicate?

a: Under budget

b: right on budget

 

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CPI greater than 1 is good

Submitted by admin on Mon, 09/26/2011 - 09:11.
CPI greater than 1 is good (under budget):
< 1 means that the cost of completing the work is higher than planned (bad);
= 1 means that the cost of completing the work is right on plan (good);
> 1 means that the cost of completing the work is less than planned (good or sometimes bad).
Having a CPI that is very high (in some cases, very high is only 1.2) may mean that the plan was too conservative, and thus a very high number may in fact not be good, as the CPI is being measured against a poor baseline. Management or the customer may be upset with the planners as an overly conservative baseline ties up available funds for other purposes, and the baseline is also used for manpower planning.

Thanks for the clairfication.

Submitted by harishgulati on Tue, 09/27/2011 - 13:29.

Thanks for the clairfication.

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